F I L E D

UNITED STATES COURT OF APPEALS

United States Court of Appeals

Tenth Circuit

FOR THE TENTH CIRCUIT

JAN 11 2001

PATRICK FISHER
Clerk

UNITED STATES OF AMERICA,

Defendant-Appellee,
v.
RONALD HERLOPH SATHER,

No. 99-7144
(D.C. No. 99-CR-29-B)
(E.D. Okla.)

Defendant-Appellant.
ORDER AND JUDGMENT

Before BALDOCK , PORFILIO , and BRORBY , Circuit Judges.

After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.

This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.

Ronald Herloph Sather appeals from his convictions under 26 U.S.C.

7212(a) (corruptly endeavoring to obstruct or impede the due administration of
the Internal Revenue Code); 18 U.S.C. 157 (bankruptcy fraud); and 42 U.S.C.
408(a)(7)(B) (use of a false social security number). He also claims that his
trial counsel was constitutionally ineffective. Our jurisdiction arises under
18 U.S.C. 1291, and we affirm his convictions.
I.
Viewing the evidence in the light most favorable to support his convictions,
United States v. Collins , 920 F.2d 619, 621 (10th Cir. 1990), we summarize the
facts as follows. In 1992 Mr. Sather decided to become an active income tax
protestor. As part of his plan to avoid taxation, and against the advice of his
accountant, he established trusts into which he diverted income from his
chiropractic business, filed quit claim deeds to remove his name from real
property he owned, placed false liens against his real estate holdings, and created
aliases with separate post office addresses. Mr. Sather ignored the advice of an
estate and tax attorney that his anti-tax plan would probably result in his
imprisonment and refused to file income taxes for tax years 1992-1995. He
became an active proponent of a tax protestor movement known as the Pilot
Connection Society, offering to help others to become untaxed for a fee.

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In 1994 the IRS requested Mr. Sathers 1992 tax return. Mr. Sather replied
that he revoked all of his signatures on prior documents filed with the IRS before
1992 and asked the IRS to refund to him monies he had paid in past taxes. In
1995 the IRS began issuing summons for Mr. Sathers business and financial
records. One of Mr. Sathers former employees testified that Mr. Sather then
instructed her to shred documents showing income so that the IRS could not
determine how much income his chiropractic office had produced, instructed her
not to place large income payments from the business on the ledger sheets, and
placed a ZAP program on his business computer system that would delete the hard
drive if the IRS came to the office. After the employee was served with an IRS
summons, Mr. Sather told her it was completely voluntary and that she did not
have to talk with anyone.
In August 1995 Mr. Sather tried to obtain credit through one of his trusts at
a local bank. He gave a social security number belonging to another individual as
his own on the loan application.
In 1996 Mr. Sather rented a storage unit so that he could hide his Mercedes
from the IRS. When renting it, he unsuccessfully tried to use an alias and again
wrongfully used the other individuals social security number as his own on the
rental form. After renting the unit, Mr. Sather actually used a different unit

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without the businesss permission, later explaining that he didnt want people to
know his business.
In 1997 Mr. Sather filed the first in a series of three bankruptcy petitions
seeking protection from federal taxes. It is undisputed that the first petition,
which he later voluntarily dismissed, falsely stated that Mr. Sather owned only
$6,365 in total assets and earned $2,000/month when in fact he owned at least
$394,782 in assets and earned over $9,000 from his chiropractic business.
Mr. Sather was convicted on eight various criminal counts after the jury
rejected his good faith defense. He appeals from only three of the convictions
and raises four issues, which we address

seriatim .

II. Discussion
A. Motion to strike surplusage. An indictment must be a plain, concise,
and definite written statement of the essential facts constituting the offense
charged. Fed. R. Crim. P. 7(c)(1). On motion of the defendant, a court may
strike immaterial or irrelevant allegations that may be prejudicial to the
defendant. Fed. R. Crim. P. 7(d) & advisory committees note;

Collins , 920 F.2d

at 631. Mr. Sather first argues that the district court erred by denying his motion
to strike paragraphs 1 through 11 of Count One, which alleged a violation of 26
U.S.C. 7212(a).

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The paragraphs at issue all refer to events occurring in 1992, which was
more than six years before March 16, 1999, when the indictment was filed.

See

26 U.S.C. 6531(5) (providing a six-year statute of limitations). The government

argued, and the district court found, that Count One alleged a continuing
violation that was not complete until March 3, 1998, and that the six-year statute
of limitations therefore did not begin to run until 1998.

See Toussie v. United

States , 397 U.S. 112, 115 (1970) (noting that statutes of limitation normally begin
to run when crime is complete). In so concluding, the district court analogized to
cases from other circuits holding that the date of the latest act of evasion triggers
the statute of limitations for violations of 26 U.S.C. 7201 (income tax
evasion). R. Doc. 22, at 2 n.1. Mr. Sather argues that the district court failed to
properly determine whether violation of 7212 constitutes a continuing
violation as that term of art was defined in

Toussie and United States v. Jaynes ,

75 F.3d 1493 (10th Cir. 1996).

We review the courts ruling on the motion to strike surplusage for abuse of
discretion. Collins , 920 F.2d at 631. It is undisputed that Count One of the
indictment alleged, and Mr. Sather committed, additional corrupt acts of
interference with the enforcement of IRS laws that occurred within the statute of
limitations; thus the question of whether 7212 alleges a continuing violation is
not truly at issue here.

Cf. Toussie , 397 U.S. at 115 (overturning conviction

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because single act of failing to register for draft was not a continuing violation
and statute of limitations had passed on that act). The only question we must
answer is whether the district court abused its discretion in presenting to the jury
alleged facts that occurred more than six years before the indictment issued. We
hold that it did not.
Even if Mr. Sathers acts in 1992 could not be separately prosecuted as
outside the statute of limitations, they were relevant to demonstrate the steps
Mr. Sather took to avoid taxation and the unreasonableness of Mr. Sathers good
faith defense in light of the warnings of his accountant and a tax attorney.

See

Collins , 920 F.2d at 622 (holding that jury could consider reasonableness of good
faith defense to tax evasion). Thus, the allegations were not mere surplusage
and the district court did not abuse its discretion in denying Mr. Sathers motion.
Even if the facts alleged were surplusage, we have long held that mere
surplusage in an indictment or information may be disregarded, and such
disregard does not render the indictment or information invalid if sufficient
remains to charge a crime.

Bary v. United States , 292 F.2d 53, 56 (10th Cir.

1961).
B. Insufficiency of the evidence - Count Five. Mr. Sather claims that the
evidence was insufficient to support a finding of criminal intent for bankruptcy
fraud because he was not represented by an attorney in his bankruptcy
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proceedings and he therefore did not realize that his admittedly false statements
were legally false. Appellants Br. at 25. We review the sufficiency of the
evidence de novo , asking whether the direct and circumstantial evidence, together
with the reasonable inferences drawn therefrom, support a conclusion that the
defendant is guilty beyond a reasonable doubt.

United States v. Hanzlicek , 187

F.3d 1228, 1238 (10th Cir. 1999).

The government established that Mr. Sather made false statements on his
1997 bankruptcy filing, including failing to claim a $30,000 firearm collection
that he had stored with a friend and his Mercedes Benz. Although Mr. Sather
attempted to explain his intent in filing conflicting and false petitions, the jury
was free to weigh the evidence and draw an inference of intent to defraud from
the evidence. The evidence was sufficient to support a finding of intent to
defraud beyond a reasonable doubt.
C. Sufficiency of the evidence - Count Seven. Mr. Sather alleges that
there was insufficient evidence to establish that he used a false social security
number with the intent to deceive another person because he used the correct
employer identification number of one of his trusts on the loan application that he
made with that trust. Unfortunately, Mr. Sather did not include the document in
the materials submitted to this court to support that claim. As the government
points out, however (albeit also without supplying the supporting document to this
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court), there was ample testimony that Mr. Sather used the social security number
of a different individual as

his social security number on the application. R. Vol.

IV at 253-54. Mr. Sathers claim is without merit.

D. Ineffective assistance of counsel. We dismiss this claim, as it should be
brought on collateral review and not on direct appeal.

United States v. Galloway ,

56 F.3d 1239, 1240 (10th Cir. 1995).

The judgment of the United States District Court for the Eastern District of
Oklahoma is AFFIRMED.

Entered for the Court

John C. Porfilio
Circuit Judge

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